RBI's bumper dividend eases govt's fiscal position says SBI report

The Reserve Bank of India's substantial dividend payout of approximately Rs 2.7 lakh crore will strengthen the government's fiscal position and support economic growth in the world's fourth-largest economy, according to an SBI economist's report.

- TDG NETWORK

Finance Minister Nirmala Sitharaman in her Budget for 2025-26 projected a dividend income of Rs 2.56 lakh crore cumulatively from the RBI and public sector financial institutions.

With the RBI's transfer, this number would now be much higher than the budgeted estimates.

"We expect the fiscal deficit to ease by 20 basis points from the budgeted level to 4.2 per cent of GDP. Alternatively, it will open up for additional spending for around Rs 70,000 crores, other things remaining unchanged," according to the latest edition of SBI Research's Ecowrap.